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  • AUD/USD falling in early Asia in illiquid market conditions.
  • RBA pulling out all of the stops, pledging it would do “whatever is necessary”.

AUD/USD has been sliding in early Asia and has broken to test below the 0.57 handle, travelling from a high of 0.57.44 to a low of 0.5674. The Reserve Bank of Australia has added A$4.2B to the banking system in the repo market although the catalyst for the move is likely to be down tot he fact how illiquid the Fx market is in Asia these day’s and sizable orders are having greater impacts. 

The COVID-19 is will likely have a major hit to economic Australia’s activity and incomes which will involve “significant job losses”, ­Reserve Bank governor Philip Lowe has told us, pledging that the central bank will do “whatever is necessary” (an echo of the Europeans) to help businesses and households navigate their way through the coronavirus crisis. Indeed, rates will be at historic lows for the foreseeable future after the RBA cut to the lower bound of 0.25 per cent in another emergency meeting this week from 0.5 per cent while warning that the impact on the economy from the ­pandemic and measures taken to contain the spread of the virus would be ­severe, but expressed faith that the damage would prove temporary.

The unemployment rate slipped back to 5.1% in February

Meanwhile,  Australia’s unemployment rate slipped back to 5.1% in February as employment rose 27k, but obviously this is seen as very dated information and the focus remains on COVIC-19 economic disruptions. 

AUD/USD levels